Grain Comments: 12-11-2023

Good morning. Ag markets are mixed to kick off the week with soybeans/products trading in the green, while the grain markets sag lower. Soybean futures are 7-10 cents higher, corn futures unchanged to down a penny, and the Chi. wheat market is off 5-6 cents. Outside markets are mostly weaker with crude oil trading roughly 50 cents lower, the stock market down 10-20 points, and gold and silver both in the red. The US$ index is up 5-10 points.

Today’s Reports: US weekly export inspections

• Market focus will return to South American rainfall this week with the USDA December report failing to provide much fodder to the marketplace. Key going forward will be whether we see a shift to a more normal rainfall pattern in the Northern half of Brazil.

• Friday’s CFTC report showed fund managers lightening positions in all 3 ag markets; Funds were net buyers of 45,945 contracts of corn, 23,764 contracts of Chi wheat, and sellers of 30,929 contracts of soybeans.

• Managed money for the week ending Dec 5th: short 160,533 contracts of corn (206,478 prev.), short 96,222 contracts of Chi wheat (119,986 prev.), and long 36,633 contracts of beans (67,562 prev.).

• Chicago wheat’s streak of 8 days of higher closes ended Friday. The last time the Chi wheat market posted 8 consecutive days of higher closes was in 2012.

• Technically, corn and beans are holding support and need to see higher trade this week to confirm that. CH support this week is seen at the 10 day moving average of 4.83 1/2. SF needs to hold last week’s low at 12.92; failing to do so would likely lead to a retest of the Oct low at 12.70 1/4.

• President Javier Milei was officially sworn in as the next President of Argentina on Sunday. The new leader is scheduled to lay out his economic plan on Tuesday, but warned Sunday that the situation would likely get worse before getting better. He takes over with the country in it’s worst economic crisis in two decades, and inflation rates soaring near 150%.

• Scattered showers dotted the North of Brazil over the weekend with traces to 0.9″ reported. Coverage of rain greater than 0.5″ was just 15%. Far southern areas were dry.

• Both the European and the American weather models continue to advertise good rains in the 11-15 day period, but have had trouble bringing this moisture into the short-term. Confidence beyond 10 days remains low and the likelihood of yield loss increases substantially into January.